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The chip giant (INTC) says it now expects to bring in revenues of $10.8 billion to $11.2 billion in the third quarter, compared with its previous guidance of $11.2 billion to $12 billion. Intel attributed the lower projection to weaker-than-expected consumer demand for PCs.

Intel's gross margins are expected to come in at 65% to 67%, compared with its previous forecasts of 66% to 68%, the company says. But surprisingly, it noted that although consumer PC sales are sluggish, demand among corporate customers remains strong and the average selling prices in that market has helped offset some of the damage.

Concerns about sluggish back-to-school sales have been lingering throughout the summer, and PCs are part of that fall product mix. Computer makers like Hewlett Packard, for example, took a hit in the third quarter, saying consumers pulled back on purchasing.

And on the other side of the spectrum, Dell confirmed Intel's experience, posting healthy second-quarter results on the back of strong sales to the corporate market.

Intel will report its third-quarter results on Oct. 12 and update its fourth-quarter expectations at that time.

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hiddenlevers

Let's take a look at the big picture context for Intel: Intel vs S&P 500 http://www.hiddenlevers.com/hl/u?bFTgYs Look how married to the market INTC has been since mid 2008. It followed S&P down exactly and traced it back up, mirroring almost every bounce and down move. There is a high beta risk for this stock, so if you believe the S&P is going down to double bottom (666 i believe) then guess what? INTC will followe her down. Intel vs PC Sales http://www.hiddenlevers.com/hl/u?cK1cdD Here you see PC sales have kept going and going since spring 2009, but INTC stock has turned south. So if those PC sales drop off for any reason (e.g. unemployment + recession deepens) then it will only accelerate INTC's downtrend.